Family office exposure and liquidity bridge calculator
This calculator sets a family office’s real estate exposure beside the cash it can reach. It answers whether upcoming capital calls and household outflows can be met without selling an asset at the wrong moment.
Calculator
| Real estate share of portfolio | |
|---|---|
| Unfunded commitments as share of liquid assets | |
| Liquid assets after 12 months | |
| Liquid assets if all commitments are called | |
| Months of coverage at the net outflow rate |
Formulas
- Real estate share = real estate invested / total portfolio
- Unfunded share = unfunded commitments / liquid assets
- Liquid assets after 12 months = liquid assets + distributions - capital calls - spending
- Liquid assets if all commitments are called = liquid assets - unfunded real estate commitments
- Months of coverage = liquid assets / (net outflow / 12), where net outflow = calls + spending - distributions
Worked example with the starting inputs
With the starting inputs in the form (total portfolio value $100,000,000; real estate invested $25,000,000; unfunded real estate commitments $8,000,000; capital calls expected in 12 months $3,000,000; liquid assets $20,000,000; annual spending and taxes paid from the portfolio $2,000,000; distributions expected in 12 months $1,500,000), the results are: real estate share of portfolio: 25.0 percent; unfunded commitments as share of liquid assets: 40.0 percent; liquid assets after 12 months: $16,500,000; liquid assets if all commitments are called: $12,000,000; months of coverage at the net outflow rate: 68.6 months.
These inputs are hypothetical and are shown only so the arithmetic can be checked by hand.
What the result means in a real deal
A capital call notice from a sponsor arrives with a due date set by the partnership agreement. The liquidity figure tells the family office whether it can wire that money without selling anything first.
That second ratio matters more to a limited partner, because the subscription agreement and the default remedies in the operating agreement attach to commitments and ignore appraised value. A late contribution can mean dilution of the interest or forfeiture of capital already paid in. The sponsor, the construction lender and the other limited partners all plan around that money arriving on schedule.
How to read and stress the result
Then change one input at a time. Push distributions back, as happens when a sponsor extends the business plan because lease-up runs slow or the exit cap rate widens. Raise capital calls, as happens when a loan agreement demands a paydown after debt service coverage slips under the covenant. Watch the line for all commitments called, since a construction budget overrun can draw the unfunded balance down quickly.
Ask the sponsor for the capital call schedule in the private placement memorandum and compare it with the distribution forecast in the latest investor report.
Where the result misleads
Liquid assets is a label, and a family office may count a brokerage account that a margin lender could restrict or a credit line that a bank can cancel. Define it narrowly before trusting any ratio.
The calculator treats a distribution as cash on a known date, yet a distribution is a sponsor decision governed by the waterfall in the operating agreement, and the lender can trap cash when the loan agreement sets a cash sweep. Unfunded commitments are rarely called evenly, and fund documents may allow recallable distributions that add calls beyond the stated amount. Months of coverage also loses meaning when distributions exceed calls and spending, because the net outflow turns negative.